US looks to cut Iran oil exports ’20 percent’ to below 1 million barrels a day

A machine gun mounted on an Iranian oil platform. Marines confiscated weapons and gathered intelligence data from the platform which was later destroyed by gunfire from US destroyers in retaliation for the mining of the guided missile frigate USS SAMUEL B. ROBERTS (FFG 58) in the Persian Gulf. (U.S. National Archives/Released)

This article was originally published by Radio Free Europe/Radio Liberty and is reprinted with permission.

The United States wants to slash Iran’s crude oil exports by some 20 percent beginning in May by demanding that importers reduce purchases or face U.S. sanctions, Reuters news agency reports.

Reuters on March 13 quoted two sources familiar with the matter in its report, quoting one as saying the “goal right now is to reduce Iranian oil exports to under 1 million barrels per day.”

The source added that the administration of President Donald Trump was concerned that if it pushed for a complete and immediate shutdown of Iran oil purchases, it would cause a large rise in prices on the world market.

“Zeroing out could prove difficult,” Reuters quoted one of the sources as saying.

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He added that a price of $65 a barrel for international benchmark Brent crude was “the high end of Trump’s crude price comfort zone.” Brent was selling at about $67.55 a barrel on March 13.

Secretary of State Mike Pompeo on March 12 said the United States is seeking to “bring Iranian crude oil exports down to zero as quickly as market conditions will permit.”

Brian Hook, the State Department’s special representative on Iran, on March 13 reiterated the U.S. policy, telling an industry conference in Houston that Washington is committed to bringing Iranian crude exports to zero.

The president “has made it very clear that we need to have a campaign of maximum economic pressure [on Iran], “but he also doesn’t want to shock oil markets.”

The United States has reimposed sanctions against Iran after withdrawing from a landmark 2015 agreement under which Tehran agreed to restrictions on its nuclear program in exchange for sanctions relief.

The United States has granted Italy, Greece, Turkey, China, India, Japan, South Korea, and Taiwan temporary waivers to import Iranian oil when the U.S. reimposed the sanctions in November.

The waivers were aimed at giving these countries more time to comply with the sanctions.

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Oil exports are a key source of revenue for Tehran, which has been hit hard by the reimposition of U.S. sanctions, often leading to unrest in Iranian cities.

The United States is expected to renew waivers to sanctions for most countries buying Iranian crude in exchange for pledges to cut combined imports to below 1 million barrels per day. That would be around 250,000 barrels below Iran’s current exports of 1.25 million barrels.